HomeMy WebLinkAboutMinutes City Council - 05/28/2002I HEREBY CERTIFY that the foregoing is a true and correct copy of the minutes of the
Regular Council Meeting of the City of Corpus Christi of May 28, 2002, which were approved by
the City Council on June 11, 2002.
WITNESSETH MY HAND AND SEAL, this 1 lth day of June 2002.
Armando Chapa
City Secretary
SEAL
PRESENT
Mayor Samuel L. Neal Jr.
Mayor Pro Tem Bill Kelly
Council Members:
Brent Chesney
Javier D. Colmenero
Henry Garrett*
Rex A. Kinnison
John Longoria
Jesse Noyola
Mark Scott
MINUTES
CITY OF CORPUS CHRISTI, TEXAS
Regular Council Meeting
May 28, 2002 - 1:00 p.m.
City Staff:
City Manager David R. Garcia
Deputy City Manager George Noe
City Secretary Armando Chapa
First Assistant City Attorney Jay Reining
Recording Secretary Rachelle Parry
Mayor Neal called the meeting to order in the Council Chambers of City Hall. The invocation
was delivered by Dr. Dan Morris, South Church of Christ, and the Pledge of Allegiance to the United
States flag was led by Council Member Colmenero. City Secretary Chapa called the roll and verified
that the necessary quorum of the Council and the required charter officers were present to conduct
the meeting. Mayor Neal called for approval of the minutes of the regular Council meeting of May
21, 2002. A motion was made and passed to approve the minutes as presented.
* * * * * * * * * * * * *
Mayor Neal referred to Item 2, a public hearing on the FY 2002-03 budget adopted by the
Crime Control and Prevention District board of directors. Council Member Kelly made a motion to
open the public hearing, seconded by Council Member Kinnison, and passed (Garrett absent).
Ms. Linda Bridges, Chairperson of the Crime Control District (CCD) board, gave a brief
history of the district. She stated that on November 4, 1997, Corpus Christi citizens voted to
establish the CCD that was dedicated to crime reduction programs and the adoption of a sales tax
rate of 1/8th of 1%. For the past five years, the CCD board has managed the budget and programs.
In keeping with their responsibilities, the members held a public hearing on April 18, 2002, and
adopted the FY 2002-03 budget on May 8th. She said the budget is designed to prepare for a phase-
out of the district if citizens fail to renew the 1/8th cent sales tax rate on November 5, 2002. If that
occurs, the sales tax collection will end on April 1, 2003.
Ms. Bridges said the $4.6 million CCD budget is built on the reality that there is a limit to
what can be funded with the 1/8th cent sales tax. The main features are primarily the 50 police
officers (which includes their salaries, benefits and equipment) and the continuation of the Juvenile
Assessment Center (JAC). She said the last 10 officers that were promised in the original CCD plan
are now in the police academy and will be graduating in October 2002. In addition, the JAC secured
a Title V grant which adds case managers, who have full loads and waiting lists. The location of the
juvenile court next to the assessment center has been a very productive endeavor. She said Judge
Minutes - Regular Council Meeting
May 28, 2002 - Page 2
Deanie King has been able to refer young people and parents to the JAC. Ms. Bridges also noted that
the CCD budget includes expenses for the November 2002 election. In addition, an independent
support group, which will promote the reauthorization of the CCD, has been formed.
Responding to Mr. Kinnison, Ms. Bridges said the budget has an eight-month calculation and
an additional four months if the district is renewed that takes it through the fiscal year. She said then
the board will look at the next five-year projection. Mr. Kinnison asked if the preliminary
discussions have been basically limited to just the 50 officers and the JAC and not a number of other
items. Ms. Bridges said the problem is that the expenses associated with the police officers continue
to grow every year because of increased salaries and benefits. She said the board has talked about
ways to minimize those expenses by moving experienced officers out of the CCD budget and into
the city's budget so the district can continue at a certain level.
Mr. Kinnison specifically asked about three budget items: legal advisor, pawn shop detail,
and support personnel. Ms. Bridges said while the board felt those items could not continue to be
funded by the CCD budget, there was strong support for the legal advisor position.
In reply to Council Member Longoria, Police Cmdr. Bryan Smith, CCD Coordinator, said
the pawn shop detail provides a very valuable service to the Police Department by correlating all the
information from Nueces County pawn shops, 90% of which are automated. He said a majority of
their time is now spent taking the 10% of the non -automated tickets and manually entering the
information to compare it with the department's computerized records. He said they have been
responsible for recovering over $1 million in stolen property. Cmdr. Smith said he is not aware of
any money in the Police Department's proposed budget to continue the pawn shop detail (although
the automated process will continue). Mr. Longoria said he thought that service was important.
Mr. Longoria also asked about street lighting. Cmdr. Smith said the CCD was able to upgrade
the lighting fairly inexpensively in many areas by improving the bulbs rather than installing new
apparatuses. He added that there is an involved process with CPL to improve the lighting. In some
instances, citizens do not believe that increased lighting will benefit them.
Responding to other questions from Mr. Longoria, Cmdr. Smith said they have down scaled
the Citizen Advisory Councils (CACs) from large groups to smaller neighborhood -based groups,
which improves attendance. He also discussed the juvenile deputy city marshals. Mr. Longoria asked
for additional information about the purpose and benefits of the legal advisor. Council Member
Colmenero also asked about the street lighting issue, CACs, and graffiti prevention, which Cmdr.
Smith discussed. Mayor Neal called for public comment.
Mr. Abel Alonzo, 1701 Thames, commended Ms. Bridges and the CCD board for keeping
the promise of 50 police officers. He pledged his support for the renewal of the district.
Council Member Chesney made a motion to close the public hearing, seconded by Mr.
Colmenero, and passed (Garrett absent).
* * * * * * * * * * * * *
Minutes - Regular Council Meeting
May 28, 2002 - Page 3
Mayor Neal referred to Item 3, the presentation of the proposed FY 2002-03 operating
budget. City Manager Garcia gave the Manager's Message, stating that the proposed budget
incorporates the priorities of the City Council as expressed in the city's mission statement and the
Council's updated goals and priorities. He noted that the General Fund proposed expenditures equal
projected revenues. He said the city's fiscal health has continued to dramatically improve as the city
no longer faces the financial crisis it did as recently as 1999. He said the emergency reserve fund
balance in the General Fund continues to grow and should reach the City Council's goal ahead of
schedule.
Mr. Garcia said that despite those improvements, this budget has been particularly
challenging to compile for significant reasons: the elimination or decline of major revenue sources
in the General Fund (specifically, a $1 million contribution from the Hospital District in support of
Health Department operations and a substantial drop in electric franchise revenue); and the multi-
year implementation of the city's new compensation and classification program. However, Mr.
Garcia said he is not recommending a tax rate increase. There is a 5% rate increase programmed for
all utilities for the capital improvement program, but no fee adjustments are proposed for solid
waste/garbage collection.
In addition, with the city's assumption of 911 service responsibilities in the city limits and
at the Naval Air Station, a 40 -cent service charge per telephone line is being recommended. He said
that charge is less than the 50 cents previously collected and is well below the rate in most other
Texas cities. Mr. Garcia said the total proposed annual operating expenditures for all funds amount
to $409,207,893 (which includes interdepartmental and interfund transfers).
The City Manager announced that the city has once again received the Distinguished Budget
Presentation award from the Government Finance Officers Association. He said this year's budget
is fashioned after the new format presented a year ago. He said through this budget, city staff has
started to aggressively address aging infrastructure needs; construct facilities that will have a major
economic impact; and reengineer operations for enhanced responsiveness at lower costs. Mr. Garcia
added that in 2002 the city is celebrating its sesquicentennial.
*Council Member Garrett arrived at approximately 1:38 p.m.
Using a computer presentation, Mr. Garcia outlined specific projects and programs that are
included in the proposed FY02-03 budget under the following categories: building and planning for
the future; strengthening the workforce; enhancing public safety; reengineering for improved service
delivery; funding improved animal care and control services; and replacing worn out equipment.
Mr. Mark McDaniel, Director of Management and Budget, discussed anticipated ad valorem
revenues and property values for FY02-03 of approximately $8.4 billion. He said at the new values,
1 cent equals approximately $800,000 assuming 3.5% growth in values (last year the growth was
4.9%). He said staff also programmed an additional 1% as a result of the annexations on the island.
He added that the city will not receive the appraisal district's certified roll until the last budget
meeting in late July, at which time staff will reconcile the actual numbers with the projections.
Minutes - Regular Council Meeting
May 28, 2002 - Page 4
Mr. McDaniel said the industrial district payments have been volatile over the years and
negotiations are under way to make them more predictable. He said staff is programming a 3%
growth in that payment for next fiscal year. He said the sales tax revenue is proposed to be $33.7
million (a 3.5% growth projection), up from $32.6 million in FY01-02. The Budget Director also
elaborated on Mr. Garcia's previous remarks about the projected loss in CPL franchise revenues,
which are budgeted at $8.8 million in FY02-03, as opposed to $10.2 million in FY01-02.
With regard to General Fund expenditures, Mr. McDaniel said one aspect is salary
adjustments, which include the following: implementation of the new classification plan -$2 million;
police and fire salary adjustments -$903,742; merit pay -$59,655; and continuation of "drag -up" pay
allocation -$1 million.
He also discussed new programs and program enhancements: eighth ambulance -$174,210;
Mustang Island Fire Station -$707,097; sworn personnel wage and benefit adjustment -$220,701;
enhanced legal services - $155,036; animal euthanasia by lethal injection - $120,000; operation and
maintenance for new Animal Care & Control Facility - $30,000; automated garbage collection
(Phase 2) - $92,824; biannual legislative program - $50,000; 911 service (excluding dispatchers) -
$336,838; PeopleSoft training - $75,000; and Island development plan - $9,000. Mr. McDaniel said
the proposed budget also includes expenditure reductions in the amount of $2.5 million and
programmed salary savings of $1.6 million. That resulted in only a 1.1% increase in expenditures
overall. He noted that the fund balance is 8.8% in FY00-01, up from 2.7% in FY98-99. He said
staffs goal is 10% within the next five years.
Mayor Neal recessed the Council meeting to read the day's proclamations.
Upon reconvening, Mayor Neal asked Mr. McDaniel to continue his presentation on the
proposed FY02-03 budget. The Budget Director then discussed the Combined Utility System, noting
that staff has programmed 5% rate increases for water, wastewater and gas. The Utility System
expenditures are budgeted as follows: salaries and wages -$85,925 increase; debt service increase
-$1 million; continuation of computerized maintenance management system -$1,015,000; and
contingencies for implementation of skill -based pay.
Regarding other funds, Mr. McDaniel said expenditures in the Marina Fund are slightly down
and a 3% slip rental rate increase is programmed to generate $22,000. There are no fee adjustments
in the Golf Centers Fund and staff is suggesting using the green fee surcharge for capital
improvements to existing courses (a driving range at Oso and irrigation repair and replacement at
Gabe Lozano). He said in the Airport Fund there are increased security costs and a non-operating
revenue increase due to grant reimbursements. In the Ambulance Fund, there is a growing General
Fund subsidy of $473,289; the cost of the eighth ambulance unit for $174,210; and firefighter pay
adjustments of $70,524. Responding to Council Member Kinnison, Mr. Garcia said at this time the
city does not participate in the most lucrative form of revenues for the ambulances --hospital
transfers --which he briefly discussed.
Mr. McDaniel said the debt service funds consist of the new Seawall Debt Service Fund -
$2,178,800; General Obligation Debt -$200,851; Utility System Revenue Bonds -$317,751; and
Minutes - Regular Council Meeting
May 28, 2002 - Page 5
Airport Debt -$383,847. He also discussed the Hotel Tax Fund and Visitors Facility Fund, which
includes the following elements: flat growth in hotel tax revenue after the discount for revenue from
the January 1st annexation; expenditure reductions for visitors facilities; funding for beach services;
pending convention center expansion bond sale; funding for Columbus Ships debt for the
Convention and Visitors Bureau; continued funding for the American Bowling Congress and the
city's sesquicentennial celebration; and contributions to other agencies at the same levels. He said
the Internal Service funds are budgeted to have an overall decrease of $105,835. Mr. McDaniel then
reviewed the FY02-03 budget meetings schedule with the budget adoption ordinance anticipated on
July 23rd.
Mayor Neal commented that the Council has received information about other Texas cities
and states struggling with their budgets; i.e., Austin is anticipating a $72 million deficit and Dallas
has a $53 million deficit. He noted that the City of Corpus Christi is holding down expenses and
increasing its reserves. He asked the City Manager to formally ask the Nueces County
Commissioners Court to provide $1 million in funding from the Hospital District and to implement
the child safety fee to help pay for the school crossing guard program, the cost of which is expected
to increase by $90,000.
The Mayor then made a motion to frame the General Fund budget discussion for FY 2002-03,
with revenues and expenses projected to be $146,514,521 and with an unreserved fund balance at
the end of the year of $10,556,387. Council Member Scott seconded the motion and it passed
unanimously on a voice vote.
* * * * * * * * * * * *
*
Mayor Neal called for consideration of the consent agenda (Items 4-16). Council members
and audience members requested that Items 7, 10 and 11 be discussed. City Secretary Chapa polled
the Council for their votes and the following passed:
4. M2002-149
Motion authorizing the City Manager or his designee to execute a novation agreement
(assignment) with Oklahoma Surety Company and Mid -Continent Casualty Company and
King Isles Inc., contractor, to complete construction of the Omaha Drive street improvement
project.
The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
5. M2002-150
Motion authorizing payment of the Special Commissioners' condemnation award of $37,000
for the acquisition of Parcel 1, consisting of a utility and temporary construction easement,
both located at the corner of Saratoga Blvd. and Greenwood Drive, to construct wastewater
improvements in connection with the Carolyn Heights diversion to Greenwood Wastewater
Minutes - Regular Council Meeting
May 28, 2002 - Page 6
Treatment Plant -30 -inch line, Project No. 7196, and for other municipal purposes.
The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
6. M2002-151
Motion authorizing the City Manager or his designee to execute a construction contract with
Mitchell's Unlimited of Robstown, Texas, in the amount of $84,950 for the Rincon Channel
and U.S. Highway 181 observation decks (wetlands interpretative overlook).
The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
8. RESOLUTION NO. 024888
Resolution authorizing the resale of 97 properties shown on the attached and incorporated
exhibits which were foreclosed upon for failure to pay taxes for minimum opening bid
amounts of 10% of the most recent appraised value for 18 properties which did not sell at last
year's auction, and 30% of the most recent appraised value for 79 properties; authorizing the
Nueces County Judge to execute a resale deed for each of the properties listed.
The foregoing resolution passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
9. RESOLUTION NO.024889
Resolution authorizing the City Manager or his designee to submit a grant application to the
U.S. Department of Housing and Urban Development in the amount of $400,000 for a Youth
Build grant to provide youth, between the ages of 16-24 years, the opportunity to earn a
graduation equivalency degree (GED), receive training in construction, and build homes for
low-income families, with $243,000 in cash and in-kind contributions from the Youth
Opportunities United, KPE-Development, Gill Roofing, Nueces County Community Action
Agency, Nueces County Public Health District, Workforce Network, Corpus Christi
Independent School District, and Regional Transportation Authority, and a $15,000 in-kind
match from the City of Corpus Christi Weed and Seed Program, and a total project cost of
$658,000.
The foregoing resolution passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
12. RESOLUTION NO. 024890
Resolution authorizing the City Manager or his designee to submit a grant application to the
Texas Department of Public Safety Division of Emergency Management in the amount of
Minutes - Regular Council Meeting
May 28, 2002 - Page 7
$70,000 under the FY2002 Pre -Disaster Mitigation Program to develop a pre -disaster
mitigation action plan with a city in-kind match of $24,000 and total project costs of
$94,000.
The foregoing resolution passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
13.a. M2002-156
Motion authorizing the City Manager or his designee to accept a renewal grant in the amount
of $1,227 and execute a contract with the Corporation for National and Community Service
for the continuation of the Senior Companion Program.
The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
13.b. ORDINANCE NO. 024891
Ordinance appropriating a grant in the amount of $1,227 from the Corporation for National
Service in the No. 1050 State and Federal Grants Fund for the continuation of the Senior
Companion Program.
An emergency was declared and the foregoing ordinance passed as follows: Neal, Chesney,
Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
14.a. FIRST READING ORDINANCE
Ordinance authorizing the City Manager or his designee to execute Amendment No.1 to the
joint use parking agreement between All Saints' Episcopal Church and the City of Corpus
Christi, authorized by Ordinance No. 021588 on March 9, 1993, to revise the parking
premises.
The foregoing ordinance passed on first reading by the following vote: Neal, Chesney,
Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
14.b. FIRST READING ORDINANCE
Ordinance authorizing the City Manager or his designee to execute Amendment No. 1 to the
lease for Jaycee Field between the Corpus Christi Independent School District and the City
of Corpus Christi, authorized by Ordinance No. 022811 on January 7, 1997, to revise duties
related to maintenance of the parking lot.
The foregoing ordinance passed on first reading by the following vote: Neal, Chesney,
Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
Minutes - Regular Council Meeting
May 28, 2002 - Page 8
15. ORDINANCE NO. 024892
Ordinance authorizing the City Manager or his designee to execute a five-year lease with
Corpus Christi United Little Miss Kickball, a non-profit organization and an affiliated
member of Little Miss Kickball International Inc., a non-profit corporation, for the use of a
portion of Bill Witt Park for its kickball program and in consideration of Corpus Christi
United Little Miss Kickball maintaining the premises and improvements.
The foregoing ordinance passed on second reading by the following vote: Neal, Chesney,
Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
16. ORDINANCE NO. 024893
Ordinance amending Section 12-45.1, Code of Ordinances, relating to occupancy of vessels
in the marina.
The foregoing ordinance passed on second reading by the following vote: Neal, Chesney,
Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
* * * * * * * * * * * * *
Mayor Neal opened discussion on Item 7, Garcia Arts Education Center area street
improvements. Responding to Council Member Kelly, Assistant City Manager Margie Rose stated
that Phase 1 is for design and construction and Phase 2 is for design and right-of-way. She said the
engineers indicated that there are not enough funds for Phase 2 and staff is suggesting that
construction monies be requested during the FY 2004 CDBG program. City Secretary Chapa polled
the Council for their votes as follows:
7. M2002-152
Motion authorizing the City Manager or his designee to use a portion of the design and
construction funds from the Garcia Arts Education Center area street improvements, Phase
1 project (design & construction), approved under the FY2000 Consolidated Annual Action
Plan (CAAP), toward right-of-way acquisition and relocation in the Garcia Arts Education
Center area street improvements, Phase 2 project (design & property acquisition), also
approved in the FY2000 CAAP.
The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
* * * * * * * * * * * * *
Mayor Neal opened discussion on Item 10, Community Youth Development (CYD)
programs. In reply to Council Member Noyola, Mr. Tony Cisneros, Director of Park and Recreation,
said the city received six applications for funds but two of them were deemed unresponsive and four
Minutes - Regular Council Meeting
May 28, 2002 - Page 9
were considered for funding. He added that this is a very intensive request for proposal process
involving the 78415 Steering Committee, whose members are trained by the state in order to
recommend the grant awards. City Secretary Chapa polled the Council for their votes as follows:
10. M2002-153
Motion approving the submission of FY 2002-2003 Community Youth Development
programs in the amount of $500,000 to the Texas Department of Protective and Regulatory
Services as recommended by the 78415 Community Youth Development Steering
Committee.
The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
*************
Mayor Neal opened discussion on Items 11.a. -c. regarding the harbor ferry operation.
Mr. Buddy Clark said he is the owner and operator of Capt. Clark's Flagship and Gulf
Clipper, which has provided boating entertainment to Corpus Christi for over 50 years. He said the
reason the items are on the day's agenda is because he notified city staff that marina construction was
illegally taking place last week because the Council had not approved it as called for in Section 12-2
of the City Code of Ordinances. He asked the Council to table the items until more information can
be obtained. He said the Regional Transportation Authority (RTA) has opened a harbor ferry "depot"
on the People's Street T -Head and during its first weekend of operation (Memorial Day weekend),
shrimpers there lost money because of the large crowds. Mr. Clark questioned why the RTA is
financially responsible for the harbor ferry stops at the barge dock and the Texas State Aquarium
(TSA) but not at the People's Street T -Head.
Mr. J.E. O'Brien, 4130 Pompano, said there had to be a reason for passage of the ordinance
that gave the Council authority to approve construction in the marina and he asked what has changed
to now make it invalid. He said the Council is intent on delegating more authority to city staff. He
said it does not make sense to propose giving the marina superintendent the authority to approve
construction in the marina when he has already demonstrated his abuse of city ordinances by
allowing construction to begin.
Mayor Neal said the Council received a letter from Ms. Shelby O'Brien (no relation to Mr.
O'Brien above) dated May 25, 2002, stating her opposition to Items 11.a. -c. She said the RTA is
using sales tax dollars and grant money to directly compete with free enterprise through its operation
of the harbor ferry. She provided signatures of over 159 people in support of Capt. Clark and she
asked that the Council table the items. The Mayor said the Council also received a request from Mr.
Bill Kopecky asking that the Council not change the ordinance (Item 11.c.).
Council Member Kinnison asked Ms. Linda Watson, RTA General Manager, to describe the
harbor ferry's history. Ms. Watson said that nine years ago the city asked the RTA to operate the
Minutes - Regular Council Meeting
May 28, 2002 - Page 10
ferry service from the barge dock to the TSA. She said the RTA commissioned a study to determine
how to improve the harbor ferry service and one of the recommendations was to add a stop at the
People's Street T -Head. She said the previous fare was $1 one way; this year the RTA will charge
a $3 fare which is good all day on the harbor ferry. She said the ferry, which is similar to a shuttle
service, operates from 10:30 a.m. to 6:30 p.m. from Memorial Day weekend to Labor Day weekend.
Ms. Watson added that the majority of the passengers are riding the harbor ferry service for
transportation and they are disembarking at their destination.
In response to other questions from Mr. Kinnison, Ms. Watson said the RTA operates the
harbor ferry as a turn -key service and they received one bid from Barney's Place Inc., which has
provided the service in the past. She added that several tourist -related entities support the harbor
ferry in a variety of ways. For example, the Downtown Management District paid for the harbor ferry
rides during the Memorial Day weekend so the public could ride for free. She said through the use
of coupons, the attendance at the tourist attractions can be tracked.
First Assistant City Attorney Jay Reining explained that staff found very few occasions where
the City Council granted permission under Section 12-2 of the Code of Ordinances. He said that
basically new pilings and stakes are installed throughout Corpus Christi Bay almost all the time and
staff decided to treat it as an administrative process at the marina by recommending that either the
Marina Superintendent, Petroleum Superintendent or City Manager be allowed to grant that
permission. He added that since most of the bay bottom belongs to the state of Texas, a permit is
required from the General Land Office as well as from the Coast Guard and the U.S. Army Corps
of Engineers. City Manager Garcia added that the current requirements are somewhat of an anomaly
and staff wanted to treat those requests as building projects, which have permit and code regulations.
Ms. Watson said the RTA has been talking with different organizations about sponsoring one
other free ride day later in the season. Mr. Kinnison pointed out that someone has to pay that cost.
Ms. Watson added that the RTA anticipated 1,500 passengers during Memorial Day weekend while
there were actually almost 12,000 passengers.
Responding to Council Member Chesney, Ms. Watson said the RTA has a contract with Mr.
Danny Duzich, the owner of Barney's Place Inc. She said the RTA is responsible for the pilings at
the TSA and the barge dock. She said since Mr. Duzich is using the People's Street T -Head dock 12
months out of the year for his boat, the RTA is paying him about $160,000 to operate the harbor
ferry service and the RTA keeps the revenues. She added that all of the RTA's park-and-ride and
paratransit ("B -Line") services are contracted out to a third -party provider.
Mr. Chesney said the complaint is that the RTA is competing with private business. Ms.
Watson said the harbor ferry is a transportation service and anyone could have responded to the
request for proposals. She said they do not consider the harbor ferry to be a tour boat service nor do
they think it competes against the private sector anymore than the RTA's buses compete against
automobiles. Mr. Garcia said the issue is whether or not there should be a harbor ferry. He added that
every other coastal city he can think of has subsidized ferries. Mr. Chesney said he does not think
they should put a private company out of business by subsidizing something that competes with it,
although he thinks the harbor ferry is a good concept.
Minutes - Regular Council Meeting
May 28, 2002 - Page 11
Ms. Watson said the RTA board members wrestle with this issue each year because they are
not certain they want to be in the ferry boat business as well. Mr. Chesney said if the harbor ferry was
truly just a transportation vehicle, the passengers should be asked to disembark. Ms. Watson said she
is very willing to work proactively with Capt. Clark and any other interested parties to try to assist
them. She noted that in the past the RTA has provided Capt. Clark's brochures to passengers of the
RTA water ferry. She added that if the water ferry captain notices someone who has ridden the boat
and has not disembarked, he or she is asked to do so.
Mr. Chesney asked why construction was initiated in the marina without coming to the
Council first. Mr. Garcia replied that that ordinance has been on the city's books for several years
and many people have constructed projects in the marina without first seeking the Council's
permission. He said staff is trying to correct the oversight.
Mr. Clark said that over 50% of the water taxi passengers ride it for sightseeing purposes.
He added that his business is off by the same amount. He said he is not trying to shut down the water
taxi but rather use it in the way it is designed and make the passengers disembark. He said his tour
boat service takes about one hour and covers a larger area.
Responding to other questions from Mr. Chesney, Mr. Garcia pointed out that the Council
does not have any authority over the RTA's operations. He said they could deny permission for
construction of the pilings, which would shut down the harbor ferry. Mr. Clark said if the pilings are
installed as requested, the ferry will be able to operate as planned. He said he wanted the agenda
items to be tabled until these issues are resolved.
Council Member Longoria said he does not object to Items 11.a. and 11.b. and he asked staff
to further develop Item 11.c. because he thinks the Council should grant permission for construction
of public piers. Mr. Reining said there is a lot of marine construction in Corpus Christi Bay, which
covers a large area. He said publicly funded projects are normally approved by the Council anyway;
however, boat operators need many replacement pilings. Mr. Longoria said he is concerned about
development at the T -Heads and L -Head.
Council Member Scott said he is glad that the RTA is spending money to help tourism in
Corpus Christi. Regarding Item 11.c., he said he agrees that maintenance and repair projects should
not come to the Council but improvements to facilities adjacent to or associated with the marina
should. Mr. Reining further discussed that issue.
In reply to Council Member Kelly, Mr. Reining said there is no record other than in the 1940s
that the Council has given consent under Section 12-2. Mr. Kelly said the only reason these items
are before the Council today is because Mr. Clark complained about the pilings being constructed
in apparent violation of the city ordinance. However, he said the agenda items have nothing to do
with how the RTA is operating the ferry.
Replying to Mr. Kelly, Ms. Watson said the ferry is the shortest way to reach the aquarium
from the bayfront. She said the RTA has a trolley that operates across the Harbor Bridge but it takes
considerably longer. She said Mr. Clark was not interested in bidding on this service and if the RTA
Minutes - Regular Council Meeting
May 28, 2002 - Page 12
did not offer it, it would not be provided. Mr. Kelly said Mr. Clark indicated that he provides a
different service. Council Member Colmenero said there have been many opportunities to reply to
the RTA's request for proposals for the water taxi service. He said he believes that both Capt.
Clark's boat and the water taxi (and any others) can operate simultaneously. He said the public and
private sector need to start working together.
Council Member Noyola said he heard complaints about parking problems during the
Memorial Day weekend and many people lost money as a result of the crowds. Ms. Watson said the
RTA is willing to encourage people to park off-site and take the trolley to the harbor ferry. City
Secretary Chapa polled the Council for their votes as follows:
11.a. M2002-154
Motion granting permission to Barney's Place Inc. for pilings installation at the Corpus
Christi Marina.
The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Kelly,
Kinnison, Longoria, Noyola, and Scott voting "Aye"; Chesney absent.
11.b. M2002-155
Motion granting permission to the Regional Transportation Authority (RTA) for pilings
installation at the City Barge Dock and at the Texas State Aquarium.
The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Kelly,
Kinnison, Longoria, Noyola, and Scott voting "Aye"; Chesney absent.
Mr. Longoria made a motion to withdraw Item 11.c. for 30 days in order to clarify the
specific authorization the Marina Superintendent will have. The motion died for lack of a second.
Mayor Neal suggested that the Council pass Item 11.c. on first reading, which will give staff time
to explore some of the issues that were raised about that section of the code. Mr. Chapa then polled
the Council for their votes as follows:
11.c. FIRST READING ORDINANCE
Ordinance amending Section 12-2 of the Code of Ordinances, City of Corpus Christi,
regarding placing obstructions in Corpus Christi Bay; providing for penalties.
The foregoing ordinance passed on first reading as follows: Neal, Colmenero, Garrett, Kelly,
Kinnison, Noyola, and Scott voting "Aye"; Longoria voting "No"; Chesney absent.
* * * * * * * * * * * * *
Mayor Neal referred to the presentations on the day's agenda, the first of which (Item 17) was
the quarterly update by the Corpus Christi Regional Economic Development Corporation (EDC).
Minutes - Regular Council Meeting
May 28, 2002 - Page 13
Mr. Joe Adame, EDC Chairman, introduced the other board members present, Mr. Jim Barnett and
Mr. Foster Edwards. Mr. Adame said the goal of the EDC is to create jobs in the community and to
do so they receive about $400,000 from the private sector and $600,000 from the public sector.
Mr. Ron Kitchens, EDC President and CEO, said that year-to-date there have been 1,692 new
jobs with 200 more jobs announced since the quarterly report was printed. He said about two-thirds
of those jobs are with existing businesses, and the EDC works with them to remove impediments
and find new opportunities for growth. Mr. Kitchens discussed several job studies, including one of
businesses in Nueces, San Patricio, Kleberg and Aransas counties regarding available labor pools.
He said the EDC is also working with military facilities in various aspects.
Mr. Kitchens said they are focusing on the issues of underemployment and unemployment.
The aviation, fabrication, and medical sectors are experiencing labor shortages, in particular the
nursing field. In addition, the EDC has a campaign to encourage former Corpus Christi residents to
return to the job market here.
Council Member Scott stated that in the June 24th issue of Forbes magazine, there was an
article about the best places to do business and Corpus Christi was listed as the 9th fastest city to
move up in that category. Mr. Scott commended City Manager Garcia and senior staff for creating
a proactive environment for businesses. Mr. Kitchens said that Mr. Jeff Moseley, Director of the
Texas Department of Economic Development, asked EDC staff to give the state agency information
about how Corpus Christi's EDC is operated.
Mayor Neal said another aspect of economic development is good schools and he
complimented CCISD staff and students for continuing improvement in TAAS scores. Council
Member Chesney said there has to be a team approach to the effort to bring good jobs to Corpus
Christi, which the Council has made their goal. He encouraged EDC staff to continue their efforts.
The Mayor deviated from the discussion to recognize Mr. Kirk Watson, former mayor of
Austin, who said he was visiting Corpus Christi during his campaign for Texas Attorney General.
Returning to the EDC discussion, Council Member Garrett asked about figures the EDC uses
regarding existing industries. Mr. Kitchens said the EDC has a program in which they have identified
223 primary companies and the EDC staff calls on those companies at least four times a year. He
said the vast majority of them inform the EDC about their expansion plans.
Council Member Kelly discussed the importance of professional sports teams in the
community. Mr. Kitchens said Corpus Christi is the largest city in Texas without a minor league
baseball team and they are working on that issue.
* * * * * * * * * * * * *
The second presentation (Item 18) was made by Mr. David Casteel, District Engineer for the
Texas Department of Transportation (TXDOT), about the SH 358 bottleneck study. He introduced
Mr. Ismael Soto, TXDOT Traffic Engineer, and Mr. Russell Henk, Texas Transportation Institute.
Minutes - Regular Council Meeting
May 28, 2002 - Page 14
Mr. Casteel said the purpose of the study is to evaluate the SH 358 corridor (South Padre
Island Drive) from Greenwood Drive to the Cayo del Oso Causeway and on SH 286 (Crosstown
Expressway) from Gollihar Road to Holly Road. He said the study will allow TXDOT staff to
identify "hot spots" and develop and evaluate operational and geometric improvements. To do so,
they will utilize the CORSIM micro -simulation model.
Mr. Casteel described charts illustrating the following: SPID corridor main lane morning and
evening peak traffic times; total yearly crashes on SPID from Crosstown to Paul Jones Avenue;
preliminary delay and cost of congestion data (on the SPID corridor and related arterials); and
estimates of cost due to traffic congestion on SPID. He said the study's preliminary findings are that
the Crosstown extension provides some relief; crossing arterials back up ramps and impact freeways;
the current ramp configuration compounds the impact of arterial dynamics; and in 10 years (even
with the Crosstown Interchange in place) more delays are expected than currently exist.
The TXDOT Engineer said that ideas to explore include adding capacity to the freeway;
changing the location, design or configuration of the ramps; improving the crossing arterials;
improving the driveway (access control) on frontage roads and arterials; and adding auxiliary lanes
on the freeway (improving the weave).
Responding to Council members' questions, Mr. Henk said that several actions --rather than
just one --need to be taken to relieve the traffic congestion on SPID. Mr. Casteel said that with regard
to TXDOT, "short-term" means three to five years and "long-term" means 10 to 20 years, and ramp
improvements would be in the long-term category. He said the next steps are to continue the
collaborative efforts between the city and TXDOT; develop and refine alternative improvements;
identify opportunities for both short- and long-term improvements; and develop conceptual designs
and estimated costs for preferred alternatives. He added that TXDOT's efforts do not duplicate those
of the MPO.
* * * * * * * * * * * * *
The third presentation (Item 19) was regarding the Air Quality Committee's research and
planning for the Corpus Christi urban airshed. Mr. Bill Hennings, Chairman, said the committee is
working hard to maintain the good air quality here and their annual kick-off event will be held on
Saturday, June 8th.
Mr. Hennings explained that the national standards for ambient air quality are carbon
monoxide, nitrogen dioxide, ozone, lead, particulate matter and sulfur dioxide. He said the
committee has been working on the ozone issue since 1995 and there are two monitors (at the Corpus
Christi State School and West Guth Park) operated by the TNRCC that continuously monitor ozone
levels. He said the standard for ozone is 125 parts per billion and during the early 1990s the
community's ozone levels exceeded the national standard. However, progress has been made since
the mid-1990s to reduce ozone levels.
Mr. Hennings discussed the importance of controlling and reducing air pollution to offset the
effects of growth. He noted that on high ozone days, Corpus Christi's levels are affected by ozone
Minutes - Regular Council Meeting
May 28, 2002 - Page 15
in the Houston, Beaumont and Port Arthur areas. He said the two largest sources of air pollution are
industrial/business sources and internal combustion engines (contained in cars, trucks, lawn mowers,
power boats, and construction equipment).
Mr. Hennings said that in 1996 the City Council approved an agreement with the regulatory
agencies called a flexible attainment action plan, which was one of three in the nation. He said that
for over a year the Air Quality Committee has been working on developing an agreement under the
Environmental Protection Agency's new policy and guidelines known as an O3Flex memorandum
of agreement. He said it sets out the plan for the next five years so the community's air quality will
meet the standards under the Clean Air Act. He said the proposed agreement continues the 1996
provisions because they are effective. He also discussed a proposal that is being developed for the
eight-hour standard and he described the standards for fine particulate matter.
Mayor Neal expressed the Council's appreciation for Mr. Hennings' dedication to air quality
issues. Responding to Council Member Kelly, Mr. Hennings said the city surpasses the ozone
standards if the one-hour average exceeds 125 parts per billion on just four days. Mr. Kelly said he
wanted citizens to appreciate the enormity of the task the Air Quality Committee is undertaking.
* * * * * * * * * * * * *
Mayor Neal opened discussion on Item 20, air quality program. There were no comments
from the audience. City Secretary Chapa polled the Council for their votes as follows:
20. RESOLUTION NO. 024894
Resolution authorizing the City Manager or his designee to execute a memorandum of
agreement with the U.S. Environmental Protection Agency and the Texas Natural Resource
Conservation Commission (TNRCC) providing for the implementation of locally defined
emission control programs should the one-hour federal ozone standard be violated in lieu of
immediate redesignation to non -attainment.
The foregoing resolution passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
* * * * * * * * * * * * *
Mayor Neal called for a brief recess. Upon reconvening, he opened discussion on Item 21,
arena naming rights agreement. City Secretary Chapa stated that Council Member Kelly had filed
a disclosure affidavit and he will be abstaining from discussing or voting on this matter.
Deputy City Manager Noe explained that the naming rights were excluded from the
agreement with SMG because that is a relatively specialized area. As a result, the city prepared a
separate request for proposals (RFP) for the naming rights and received proposals from two national
firms. After interviewing both, staff is recommending the firm SFMG, which is not associated with
SMG.
Minutes - Regular Council Meeting
May 28, 2002 - Page 16
Mr. Noe said the proposed agreement includes the following provisions: payment of $5,000
a month for nine months; reimbursement of expenses up to a maximum spelled out in the contract;
and payment of a commission on a sliding scale should SFMG secure the naming rights themselves.
He gave the example that the City of Laredo is expecting to receive $3 million over 10 years for the
naming rights for their facility.
Responding to Council Member Kinnison, Mr. Noe said SFMG has contacts with national
firms they have previously marketed to for other facilities. Mr. Kinnison asked if staff had pursued
local firms. Mr. Noe replied that they considered that but wanted to ensure that they do not sell the
city short on the real value of the arena's naming right. He added that the arena suites will be one
of the last issues to be decided.
Mayor Neal asked about the time limit and Mr. Noe said it is a nine-month contract. There
were no comments from the audience. Mr. Chapa polled the Council for their votes as follows:
21. M2002-157
Motion authorizing the City Manager or his designee to execute a contract for professional
services with WRCHowell Inc. of Cleveland, Ohio, (d.b.a. SFMG) for a fee of $45,000 plus
expenses and a commission not to exceed seven percent (7.0%) of the gross revenue
generated from any naming rights agreement entered into by the City of Corpus Christi.
The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kinnison, Longoria, Noyola, and Scott voting "Aye"; Kelly abstaining.
* * * * * * * * * * * * *
Mayor Neal opened discussion on Item 22, Packery Channel financing team. City Secretary
Chapa said that Council Members Garrett and Kelly had filed disclosure affidavits and will be
abstaining on this matter.
Assistant City Manager Jorge Cruz-Aedo explained that the tax increment financing (TIF)
zone was created by the city to market the bonds, which are estimated to be $10 million. He said all
of the recommended firms, which have previously worked for the city, have experience in specialty
financing. He said this will involve a private -placement bond issue with three different traunches.
Mr. Al Allison, of M.E. Allison & Company, noted that his father prepared the financing and
sold the bonds for the JFK Causeway construction several years ago. He said despite pessimism
about that project, the bonds were paid off 10 years ahead of schedule. Mr. Allison said he is staking
both his personal reputation and that of his firm on the belief that the Packery Channel project will
be constructed.
Mayor Neal spoke in support of the proposed financing team. There was no other public
comment. Mr. Chapa polled the Council for their votes as follows:
Minutes - Regular Council Meeting
May 28, 2002 - Page 17
22. M2002-158
Motion approving the selection of financial advisor, Coastal Securities; co -underwriters,
M.E. Allison and Company and Dain Rauscher; and bond counsel, McCall, Parkhurst for
Packery Channel.
The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Kinnison,
Longoria, Noyola, and Scott voting "Aye"; Garrett and Kelly abstaining.
* * * * * * * * * * * * *
Mayor Neal opened discussion on Item 23, South Guth Park master plan project. Mr.
Cisneros explained that that park serves two purposes: as the neighborhood park for that area as well
as a popular, frequently used athletic complex. As a result, representatives of several groups,
including the Pharaoh Valley Neighborhood Association (PVNA), were involved in the planning
process. He said the master plan lays the groundwork for any future improvements. The Mayor called
for public comment.
Ms. Miriam Wagenschein, 6810 Sahara Dr., said she is chairperson of the PVNA's Park
Committee. She said the members support the master plan because it will be a very different kind
of park that serves a number of needs and age groups. She said this park should be beautiful because
it is the gateway to Padre Island and is an extension of Ocean Drive via Ennis Joslin. In order to
allow for maximum use by all parties, they recommend the idea of shared parking. She said the
PVNA members will be helping to raise money for the park's construction and they will probably
ask for financial support in a future bond issue.
Ms. Pat Suter, 1002 Chamberlain, said she is very interested in the PVNA's efforts and the
proposed master plan because the Hans Suter Wildlife Area is located across the street from South
Guth Park. She said she will provide her assistance to this project.
Responding to Council Member Scott, Mr. Cisneros said that representatives of the athletic
leagues worked with staff on the master plan. Mr. Scott said he is glad that the leagues and the
neighborhood association reached compromises on several issues. Mr. Cisneros described plans for
irrigation and future parking and he discussed the existing athletic fields. City Secretary Chapa
polled the Council for their votes as follows:
23. M2002-159
Motion authorizing the proposed South Guth Park master plan project.
The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett,
Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye."
* * * * * * * * * * * * *
Minutes - Regular Council Meeting
May 28, 2002 - Page 18
Mayor Neal called for petitions from the audience.
Mr. Leon Perez said that desalination is very important and is not a new concept. He also
criticized the water being piped from Lake Texana.
Mr. Lonnie Laningham said he is opposed to the possibility of a baseball stadium being built
in the downtown area because of traffic congestion from the arena and other facilities. He said it
should be built in the westside corridor between Greenwood Drive and the airport.
Ms. Kay Noyes said she would like to have space for the city to advertise on a bus. She said
she is raising money for a non-profit organization. Mayor Neal suggested that Ms. Noyes discuss her
idea with city staff.
*
***
Mayor Neal opened discussion on Item 24, consideration of lease negotiations between the
City of Corpus Christi and Mr. Leon Loeb, owner of Landlord Resources Inc. (LLR), on the South
Wharf project. The Mayor said the purpose is to try to proceed one way or the other with this project.
In a computer presentation, Deputy City Manager Noe said the six significant issues that need
to be resolved are term, lease rate, utility extensions, parking, traffic, and planning. He said Mr. Loeb
is requesting a 60 -year lease and city staff is recommending a 40 -year lease. With regard to the lease
rate, LLR is requesting the following: years 1-7, $12,000 per year; years 8-11, $30,000 per year;
years 12-15, $60,000 minimum or 2% of rents (net any pass-throughs); and years 16 and up, $90,000
minimum increasing by the consumer price index. He said staff's position is to amend the ramp up
with 2% net of taxes and insurance only.
Mr. Noe said LLR is also asking that the city bear the cost of extending utilities to the site
and waive all fees for hook-ups. Staffs position is that LLR should pay the cost of utilities extension
and connection like all other developers. Mr. Loeb requested that the city provide 480 spaces out of
the Memorial Coliseum parking lot to count toward the parking requirements in the City Code for
his development. Also, LLR wants the city to use its best efforts to relocate the Buccaneer Days
carnival and, if that parking lot is used for any other reason, the city would be obligated to replace
the 480 spaces somewhere within 800 feet of the South Wharf. He said the city's position is the same
with the exception of the request to replace the 480 spaces in the event of redevelopment of that lot.
Mr. Noe explained that LLR is requesting that the city provide traffic control, including
signals, while the city's position is that all traffic controls must meet specific warrants and the signal
should be paid for by the developer. Regarding planning issues, Mr. Loeb is asking that the city
support several planning and zoning variances, such as uses, signage, set backs and others. Staff's
position is that Mr. Loeb should use the normal process to secure any variances.
The Deputy City Manager said that three other issues are subleases, governmental authority,
and commitment/schedule of investment. He said the financial impact of Mr. Loeb's requests are
estimated to be utility extension -$968,190; utility connection -$22,000; traffic signal -$75,000 to
Minutes - Regular Council Meeting
May 28, 2002 - Page 19
$100,000; and parking replacement -$3.4 million to $5.7 million. He said the policy issues are
whether the city should provide economic incentives to support or facilitate the South Wharf
development and whether it should be subject to the same planning and development rules as other
projects. He said staff believes that the current agreement provides little guarantees on development
and that the city's position is fair and does not provide economic incentives to the project.
Mr. Loeb then gave his own computer presentation in which he showed photographs of a
former commercial wharf which was footed at the corner of Cooper and Water streets. He said the
photos show that most of the buildings currently located in the downtown area west of Water Street
had already been built 15 years after the 1919 hurricane and prior to the construction of the seawall.
He said there was a thriving commercial waterfront and a community that fronted on the bay. He said
that today the downtown area's relationship to the water has been severed by the uphill slope from
Water Street to Shoreline and several high-rise buildings that have been built near the water.
Mr. Loeb said that while the seawall is being rebuilt, the city has the opportunity to bring the
bayfront back into focus as the center of community life. He said the choices are to do nothing; make
the seawall a more comfortable place with green spaces and other amenities; promote "packaged"
developments such as the proposed Landry's development; or create a unique waterfront
environment. He said in order for the South Wharf project to proceed, there has to be broad
community support and the development has to meet environmental regulations and be appealing
enough to attract private capital.
Mr. Loeb then described his proposed location for South Wharf in the marina's south basin,
which currently is known for the way litter collects there. However, he said it has great potential
because it is at the center of many mixed uses and has adjacent public parking. He also discussed
how each step of the development process involves a price tag and is a risk with no payoff until the
project reaches fruition.
Mr. Loeb explained how the South Wharf concept reached this point as well as the political
and physical elements of the project, which preliminarily consists of 40,000 square feet of retail and
restaurant space (primarily locally owned and operated businesses); water equipment and beach
service rentals serving the basin and McGee Beach; a youth sailing center; office space; some
residential spaces; marina; and a bed and breakfast serving mainly transient boaters. He said the
point is to establish an urban waterfront that is consistently utilized throughout the year. He also
discussed challenges that face the project.
With regard to costs, Mr. Loeb said they believe the land improvements will be about $5
million; $20 million for the building; and annual tax payments of about $600,000 (a third of which
goes to the city). He said they estimate that the project will result in a $40 million total benefit
package to the city over the 60 -year lease term, at the end of which the city will own the project. He
also discussed their optimal time line for the development with the possibility of being operational
by the summer of 2005.
Responding to Mayor Neal, Mr. Noe said staff believes that 60 years is an unusually long
lease term and that it is possible to amortize the developer's investment over 40 years instead. Mr.
Minutes - Regular Council Meeting
May 28, 2002 - Page 20
Jim Plummer, an attorney with Fulbright & Jaworski, said another issue is the time period in which
the city is assured of receiving a fair market value return. Mr. Harry Marks, an attorney representing
Mr. Loeb, pointed out that the lease contains a percentage rent increase and a CPI increase. In
addition, he said Mr. Loeb --not the city --is the developer of the project.
In reply to another question from the Mayor, Mr. Noe said that staff is open to further
discussion but without additional information (such as a detailed proforma), staff cannot recommend
beyond just excluding taxes and insurance. Mr. Loeb said LLR is not asking that any of their
overhead be excluded from the amount used to compute the percentage rent. Mr. Noe said the
language that has been proposed is "expenses incurred by the tenant" with the tenant being Mr. Loeb.
Mr. Noe said those expenses can be anything. Mr. Loeb said that is one of the relatively smaller
issues, adding that the basic aspects of the whole discussion are the city's policy issues and large
economic issues.
Council Member Scott referred to Mr. Loeb's proposed 60 -year lease term. Mr. Noe said the
city can include provisions that ensure a quality project for all 60 years; however, the current lease
does not contain minimum maintenance requirements. Mr. Plummer said the difference between a
40 -year and 60 -year lease is that in the latter, the last 20 years become highly profitable.
Council Member Kinnison noted that other leases the city has are much shorter, such as with
Landry's Inc. for Joe's Crab Shack on the Lawrence Street T -Head and with Ms. Jane Stubbs for the
bait stand on the Cooper's Alley L -Head. He said the voters will express the most concern about a
60 -year lease.
Council Member Kelly said there is nothing in the lease that requires the development to
match the designs Mr. Loeb has presented. Mr. Noe said the development would have to meet certain
zoning and building codes. He added that any assignment of the lease would require the Council's
approval but there is nothing that states that Mr. Loeb has to be the person to build the development.
Mr. Plummer said the longer term increases the project's marketability.
Responding to Council Member Chesney, Mr. Noe said Mr. Loeb's proposal has a lease term
with two renewal options for a total of 60 years. Mr. Chesney said the developer would be making
a substantial investment to build something that the city does not have. Mr. Noe reiterated that 60
years is a long lease term. Mr. Kinnison said it would be different if there was language in the lease
obligating Mr. Loeb to a certain level of development, such as $20 million. Mr. Loeb replied that the
problem would be what would happen if those requirements are not met.
Council Member Colmenero said the potential marketability of this project to the voters is
on the line as they listen to this discussion. He said this process makes it difficult to reach an
agreement on the terms. Council Member Noyola said the parties are not even close to an agreement
and he wants something that can be supported by the voters. Mr. Kelly said he thinks this process
is counterproductive. Mr. Chesney suggested that the city hire a professional mediator. Additional
discussion ensued about the negotiation process and the critical issues involved.
Mayor Neal announced that the Council was going into executive session pursuant to Texas
Minutes - Regular Council Meeting
May 28, 2002 - Page 21
Government Code Sections 551.071, 551.072 and 551.087 regarding the South Wharf project in the
Corpus Christi Marina, with possible discussion and action related thereto in open session. The
Council went into executive session. The Council returned from executive session. The Mayor asked
city staff and Mr. Loeb and his attorney to take time during the Council meeting to further discuss
the South Wharf proposal.
* * * * * * * * * * * * *
Mayor Neal called for the City Manager's report. Mr. Garcia said that the mother of Mr. Jesus
Garza, former city manager of Austin and former deputy city manager of Corpus Christi, passed
away. Her funeral will be held on May 29, 2002. Mr. Garcia said the June 1 lth, June 18th and June
25th Council meetings will begin at 1 p.m. with detailed discussions about the proposed budget and
several other issues.
Mayor Neal requested information about whether or not the city has an ordinance prohibiting
the sale of animals on public street corners and retail parking lots. Mr. Cruz-Aedo said that is one
of the issues that will be addressed during a future animal control discussion. The Mayor also
reported a large pile of yard waste on private property on South Staples Street between Williams
Drive and Holly Road and unclean conditions on McGee Beach and the seawall area. In response
to a recent letter to the editor, the Mayor said the Council intends to pay all city employees fairly and
justly. Mayor Neal then called for Council concerns and reports.
Mr. Chesney said there was an article in the Dallas Morning News about the seaweed
problem on Corpus Christi's beaches, which is counterproductive to tourism efforts. He also
commented on the graffiti clean-up program and on paying city employees fair wages. Mr. Garrett
asked staff to review the regulations regarding car -towing fees.
Mr. Longoria requested information regarding proposed employee benefit adjustments and
he asked staff to respond to concerns about dogs and other animals being permitted in Kids Place
at Cole Park. Mr. Noyola asked for more information about a specific letter from a city employee
and he asked for a report from Mr. Escobar about Mr. Rodriguez's concerns.
Mayor Neal called for a brief recess of the Council meeting since city staff and Mr. Loeb
were still discussing the South Wharf project. The Mayor reconvened the meeting.
Mr. Noe reported that staff went over all the items that were discussed previously and
responded to a number of questions. He said there are several things staff needs to consider regarding
the structure of the ordinance itself. Mr. Loeb stated that the Council did a lot of hard work during
the executive session and came up with some very interesting proposals, which he and his associates
will consider over the next few days and then report back to the Council.
Mayor Neal said the Council sincerely tried to proceed with the South Wharf issue. There
being no further business to come before the Council, the Mayor adjourned the Council meeting at
9:28 p.m. on May 28, 2002.